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M. Continuo

New Irish PM Cowen faces tough fight on economy


    By Andras Gergely

    DUBLIN (Reuters) - Brian Cowen, who takes over as Irishprime minister on Wednesday, has a reputation as a toughfighter -- something he will need if he is to deal with aturbulent economy and a challenging EU referendum campaign.

    Bertie Ahern, who resigned on Tuesday after a corruptioninvestigation began to overshadow his government's work, leavesas his legacy one of Europe's richest countries and a morestable Northern Ireland next door.

    After a decade of construction-fuelled expansion, however,Ireland now faces much slower or negative growth.

    Analysts hope Cowen will keep the discipline he showed asAhern's finance minister and not overspend or agree toinflationary wage rises, which would hurt the competitivenessof exports and might tip Ireland into a recession.

    "Cowen gives the impression that he has a sort of bulldogstrategy in that he may take a tougher line with the unioniststhan Bertie Ahern," said Alan McQuaid, economist at Bloxhamstockbrokers.

    Cowen will also need to convince Irish voters to supportthe European Union's "Lisbon" reform treaty on June 12, in theonly referendum planned on the issue among 27 member states. Arecent poll showed most voters do not understand the treaty.

    A cartoon in the Sunday Business Post newspaper likenedCowen's position to that of Giovanni Trapattoni, the starItalian coach hired recently to get the team into the 2010World Cup finals after they missed out on Euro 2008.

    "How do you fancy our chances in the big Lisbon match?," areporter asks Cowen in the cartoon.

    "No bother. If we don't get a result in June ... we'llreplay in November," Cowen replies in an apparent reference to2002, when Ireland staged an embarrassing repeat of areferendum on the Nice Treaty on EU enlargement.

    Cowen, already elected leader of the main governing partyFianna Fail, is expected to be confirmed by fellow deputies asprime minister around 2:30 p.m. British time and to unveil hisnew cabinet later in the day.

    Although Cowen has dismissed all speculation as unfounded,Irish media named Enterprise and Trade Minister Micheal Martinas favourite to become finance minister. Bookmaker Paddy Powerhowever listed Foreign Minister Dermot Ahern as more likely.

    (Editing by Matthew Jones)